Contract Definition and Classification Under Civil Law: Types, Characteristics and Examples
Contract Definition
A contract is a legal agreement in which two or more parties consent to create, transmit, modify or extinguish rights and obligations. It is the most important source of obligations in the civil law system.
Contracts may exclusively create personal rights, such as the obligations arising from a loan, and may also create real rights. Examples of contracts that create real rights include the mandate, the deposit, the loan for use (commodatum) and lease, which generate exclusively personal rights.
Main Classifications of Contracts
These classifications are presented in doctrine and in positive law, from several points of view. The main categories are:
- Bilateral and unilateral contracts
- Onerous and gratuitous contracts
- Commutative and aleatory contracts
- Real and consensual contracts
- Formal and consensual contracts
- Principal and accessory contracts
- Instantaneous and successive contracts
Unilateral and Bilateral Contracts
A unilateral contract is one that only generates obligations for one of the parties, while the other party holds rights. It is formed when only one party is bound to the other without the latter being obliged in return.
A bilateral contract is one in which the wills of the parties give rise to both rights and obligations for each of them.
Article 1835 of the Civil Code of the Federal District (Mexico) establishes: "The contract is unilateral when one party alone is bound to the other, without the latter being obliged in return." Article 1836 states: "The contract is bilateral when the parties are mutually bound to each other."
Onerous and Gratuitous Contracts
An onerous contract imposes reciprocal benefits and burdens on the parties. It is gratuitous when the benefits correspond only to one of the parties, and the other bears the burden alone.
Some authors point out that not all bilateral contracts are onerous, and not all onerous contracts are bilateral.
Commutative and Aleatory Contracts
Onerous contracts are subdivided into commutative and aleatory contracts.
- Commutative contracts: the benefits and burdens are certain and known to the parties from the moment the contract is concluded. They are determinable if the amount of the reciprocal performances can be established at the time of the agreement.
- Aleatory contracts: the benefits and burdens depend on an uncertain condition or event, so that the amount of the performances cannot be determined accurately at the time of conclusion, but only once the condition or risk has occurred.
Real and Consensual Contracts
Real contracts are those that require the delivery of a thing for their perfection. Without delivery, the contract does not take effect; the agreement alone is only a preliminary or promissory contract.
Consensual contracts are perfected by the mere consent of the parties, without the need for delivery of a thing.
Formal and Consensual Contracts
Another very important classification, given the consequences for validity and nullity, distinguishes solemn, formal and consensual contracts. This classification relates to the solemnity or formality required for the validity of the contract.
Formal contracts are those in which consent must be manifested in a specific way. If the required form, such as a public or private written document, is not observed, the contract is void or voidable depending on the legislation. Formal contracts may be ratified expressly or tacitly; the defect is cured if the required form is later complied with voluntarily.
Consensual contracts, in contrast to formal ones, are those whose validity does not depend on a particular form. Consent may be expressed verbally, tacitly, or through signs or gestures that unequivocally reveal the will of the parties, without requiring written documentation.
Principal and Accessory Contracts
Principal contracts exist independently. Accessory contracts, by contrast, depend on a principal contract and follow its fate: the nullity, invalidity, revocation or extinction of the principal contract affects the accessory contracts originating from it.
Accessory contracts are also called guarantee contracts, as they are generally intended to guarantee the performance of the principal obligation.
Instantaneous and Successive Contracts
Instantaneous contracts are those whose performance takes place at a single moment, while successive contracts are those whose performance extends over a period of time, through periodic or continuous performances.